Group that distributes Mercedes in Ireland shifts control offshore

The wealthy O'Flaherty family who own the MSL motor group, the main distributor for Mercedes-Benz cars here, have shifted ultimate control of their sprawling business empire offshore, company filings suggest.

Accounts recently filed for MML Holdings, which comprises the O’Flahertys’ motoring and property investment interests, show that its turnover in 2018 fell by 11 per cent to almost €240 million.

The accounts also show that ultimate ownership of the group shifted during the year from Irish company O’Flaherty Holdings to a new company called Hailstone Holdings.

Family members, including the MSL group’s chairman Stephen O’Flaherty, swapped shares in O’Flaherty Holdings for stakes in the new company. Change of control filings for UK companies linked to the family show that Hailstone is registered to an address on the island of Malta.

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The O’Flaherty family made no response to a request for comment on why they have moved control of the group offshore.

Unanticipated deterioration

As well as having the contract for importing Mercedes-Benz passenger cars and commercial vehicles into the State, the group also operates a retail division of motor dealers. It includes MSL Ballsbridge Motors, MSL Grange Motors, and MSL Park Motors, which operate Mazda and Skoda showrooms.

The accounts for MML show that in addition to the slide in sales, profits at the group also declined in 2018 by 42 per cent to about €8.2 million. The directors of the business said it was affected by sterling exchange rates and an “unanticipated deterioration” in the market in 2016.

This is a reference to the 2016 Brexit vote, which weakened sterling and made UK car imports cheaper in Ireland, putting pressure on dealers here. “This particularly uncertain environment continued into 2018,” the group’s directors said.

The accounts show that the group, which was once also the main Irish distributor for both Volkswagen and Mazda, is sitting on a large pile of past earnings.

Accumulated profits on MML’s balance sheet still stand at €251 million, while it has total equity of €256 million.

Profitable

MML owns €48.2 million worth of investment properties, according to the financial statements. The accounts suggest that its property interests include some or all of a retail park on Kinsale Road in Cork. It also appears to have invested €5.2 million in a property company in Texas in the United States.

While the group remained profitable despite the slide in sales, MML’s accounts show that it bled cash in 2018, with its cash balance reducing from €16.2 million to €2.4 million.

The group has its roots in a company founded by legendary Irish businessman Stephen O’Flaherty, grandfather of the current chairman. He built the group in the 1950s after securing the franchise for Ireland and also the UK for Volkswagen, eventually becoming one of the richest men in Ireland.